What is conversion rate optimisation? Put simply it's good business

Chris Ryan
By Chris Ryan
27 Apr 2016

What is CRO? Put Simply it’s Good Business

How do you predict the long-term worth of anything you are advised to do in digital marketing? One way is to sanity-check what’s being recommended against established, common sense principles of good business.

Many of the SEO tactics sold in recent years turned to dust when Google enhanced its ranking algorithms. Should brands have seen this coming? Did they think link manipulation and scattergun content would work forever? And did those tactics enhance their brand anyway? 

Similarly, targeted paid search has a place, but not as a catch-all traffic generator to replace organic traffic lost when the SEO stopped working. As Search Engine Land pointed out in 2015 bid prices continue to rise and may become prohibitive for your most important keywords. What then?

 

New customers are expensive

Ever since we’ve had businesses we’ve known that attracting new customers is one of the hardest things you can do. The biggest distortion in digital marketing is the disproportionate effort that goes into generating visitors, feeding the top of the funnel, or whatever else initiates your sales process. For many businesses this has become the main metric they focus on.

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Generating footfall or eyeballs will always be challenging. Because it’s so challenging, smart businesses have always understood the value of turning more prospects into sales and earning more revenue from every customer. Welcome to Conversion Rate Optimisation or CRO.

Put simply, converting opportunity into revenue is what CRO is all about. If you want more background and an overview of all of the common terms used in CRO you can find it here.

Ignoring CRO while investing in PPC and SEO is a bit like paying a fortune to locate a physical shop in a prime location, taking out expensive advertising and then paying no attention to product displays, the layout of the store or the quality of your staff.

More sales with no new customers

If you have an eCommerce site you’ll probably convert between 2% and 4% of your site visitors into a sale. If you’ve never carried out any structured optimisation your conversion rate will almost certainly be at least 50% lower than it should be. In other words, you could increase your sales by 50%. without a single new site visitor or any additional product lines.

I’m assuming here that the site was built competently by somebody who understands eCommerce good practice. You could possibly double or treble the increase in sales if your site developer didn’t really understand what convinces people to buy online or if your site performs poorly.

Engaged customers are happy customers

A study published by MOZ in 2015 confirmed what we see consistently in our clients’ data: more time on your site and more average page views result in higher conversions. In other words, keep people engaged and they are more likely to buy. It’s not all about price!

CRO is about the whole experience somebody has when they visit your site. The quality of that experience is a pretty good indicator of whether they will make a purchase and of whether they will return.

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Not just eCommerce

Even if you don’t carry out sales transactions on your site, CRO is still a driver for success. Your site should always have conversion goals that you are monitoring and trying to improve. It might be a prospect making a phone call, filling out a form or clicking a specific CTA. 

The way you structure your site, the content you present, and how you present it will determine how many customers reach a defined goal. CRO makes it easier for them to get there and more likely they’ll do what you want.

An investment with a lasting return

I’ve seen agencies claim that this is all free additional profit. It isn’t. Claiming that it’s something for nothing is a bit of an insult to your intelligence.

CRO is skilled work involving analysis, observation, modelling and testing. This has a price - but it’s a better investment than ploughing thousands over and over again into escalating PPC and SEO budgets with short-term returns.

The benefits of conversion rate optimisation are enduring. The budget you spend this month will continue to reap returns in a year’s time. Think of it more like a capital investment than a consumable cost.

How it works

The changes you need to make to your website and user experience to increase conversions are unique to your business and your customers. Some best practice principles are universal (eg simple is always better than complicated), but specific improvements will always depend on who your customers are, what they prefer and how they behave.

The process starts with analysis of data and behaviour to understand exactly what your customers want to do and where they are struggling. The resulting Insights Report provides a sound basis for designing statistically significant tests that will progressively improve your conversion rates.